Will consumers have an appetite for robot-car grocery...

1of3Anitha Arackaparampil removes groceries from Farmstead that were delivered to her Burlingame home by Udelv.Photo: Paul Chinn / The Chronicle

2of3Some customers say a downside of autonomous vehicle delivery: They have to leave their homes to retrieve their groceries.Photo: Paul Chinn / The Chronicle

3of3JuanJuan Sun places an order through the DeMartini market app for groceries to be delivered by AutoX to her home in Santa Clara.Photo: Josie Lepe / Special to The Chronicle

Anitha Arackaparampil likes the idea of robot cars delivering groceries to her Burlingame home for her family of four — in theory.

In reality, deliveries she’s received from test runs by a pilot project of digital grocer Farmstead and autonomous van maker Udelv had issues.

With regular deliveries, a driver brings them to her door. With autonomous deliveries, customers are summoned by text to retrieve their goods from the vehicle, to simulate what the driverless future will be like.

“The things I order are heavy, and our driveway is quite long,” she said. “If my husband isn’t home, it’s inconvenient to leave the kids alone.”

Her reaction encapsulates some obstacles that autonomous deliveries, whether from driverless cars or sidewalk robots, may encounter: They can be more hassle than having someone else schlep bags up the stairs or driveway.

JuanJuan Sun buys a drink from the back of an AutoX delivery vehicle, which also offers goods designed for impulse purchases.

Photo: Josie Lepe / Special to The Chronicle

Still, some experts think that robot deliveries, rather than robot taxis, may be the first commercial use of driverless vehicles. Several Silicon Valley startups, including Udelv, Nuro and AutoX, are already experimenting with autonomous last-mile deliveries in partnership with grocers and other retailers. For now, they still have back-up drivers aboard.

Related Stories

Precise delivery times, labor cost savings and not having to visit the grocery store outweigh the pain of having to meet robot deliveries curbside, the companies say. Moreover, people are conditioned to curbside meet-ups, thanks to Uber, Lyft and the raft of food-delivery services. Also: No tipping required.

“Last-mile (robot) deliveries represent an elegant juxtaposition of a market need and a market opportunity,” said Dave Ferguson, CEO and co-founder of Mountain View’s Nuro, which has a deal with supermarket giant Kroger to test robot deliveries, starting in Arizona.

Groceries are a $648 billion market, according to the U.S. Department of Agriculture’s 2018 figures, with only a fraction of that ordered online and delivered. But there’s plenty of appetite for change, as about four-fifths of consumers would like a delivery option, he said.

“We think there will be a revolution in how people look at deliveries,” said Daniel Laury, CEO of Burlingame’s Udelv. It currently deliveries groceries and other goods in the Bay Area and has a deal with grocery chain Buy For Less to operate 10 autonomous delivery vehicles in Oklahoma City next year.

“It will end up being an appointment, with goods that come to you at an exact ETA, just like Uber,” Laury said. “We want to make people’s lives easier.”

Consulting firm McKinsey & Co. predicts that automated vehicles, including driverless cars outfitted as “mobile parcel lockers,” sidewalk robots and drones, will handle 80 percent of deliveries within a decade in developed countries where wages are higher.

Michael Ramsey, research director at Gartner, said he’s not convinced yet.

“Focusing on delivery is sensible; it’s low-speed, less complex, short distances, and there’s no stopping the trend of more and more deliveries,” he said. “But existing delivery services that use humans can bring the thing to your door.”

Maureen Blaskovich pulls her groceries out of the trunk of a self-driving car, a Lincoln MKZ outfitted with technology by AutoX. The company is partnering with grocery delivery startup GrubMarket in a pilot test to deliver groceries to shoppers near the company's headquarters in San Jose.

Photo: Ryan Nakashima / Associated Press

His view: Autonomous vehicles make the most economic sense in environments with high labor costs, difficulty finding workers, and repetitive, boring tasks with little public interaction. Examples would be mining trucks and airport baggage carrying.

Still, there are other arguments for deliveries as the first use of driverless cars.

Robot taxis face a psychological hurdle: Polls show many people are frightened to ride in them, all the more so since a fatal accident in March when an Uber self-driving car struck and killed a pedestrian in Arizona.

Robot cars, especially in their early days, may annoy passengers by being overly cautious as they creep through intersections or by braking abruptly when they perceive a hazard.

“If we spill the wine or break the eggs, it’s not a big deal,” Laury said. “It’s safer and easier to do cargo than passengers.”

Both Udelv and Nuro use “neighborhood electric vehicles,” battery-powered cars with a top speed of 25 mph. Such vehicles have fewer regulatory impediments than full-fledged cars.

Nuro, with $92 million in venture backing, has the most radical design. Its vehicles are half the width of conventional sedans, have no manual controls, cannot carry drivers or passengers, and feature two storage compartments with lift-gate doors. Airbags and other safety features are on the exterior of the vans.

For now, it’s using modified Toyota Priuses for its Arizona Kroger pilot, but it plans to have some of its custom vehicles deliver for Kroger by year end. Ferguson and co-founder Jiajun Zhu spent years in key roles at Google’s self-driving project, which has now morphed into Waymo, a unit of Google parent Alphabet.

Udelv’s bright orange, boxy vans are built on Polaris GEM frames. Since January, the 2-year old startup has completed over 1,000 deliveries for a dozen paying clients in the Bay Area, including its flagship account, Draeger’s Market.

“We’ve added restaurants, a florist, bakers, auto parts distributor, fruit delivery company and now Farmstead,” Laury said. Its vans travel within a 15-mile radius of stores where it picks up.

Udelv’s distinguishing feature: “We are a real cargo van that can carry multiple packages from multiple clients at a time,” he said. “Our vehicle has 18 compartments in four different sizes that are like lockers on wheels.

So far, Udelv has two vehicles on the road and has commissioned three more. Laury declined to say how much venture backing it has.

Farmstead CEO Pradeep Elankumaran said he hopes that working with Udelv will lead to faster, cheaper deliveries. The test runs started in September and so far customers are enthusiastic, he said.

San Jose’s AutoX, with $43 million in backing, is using five self-driving green-and-yellow Lincoln MKZs for a delivery pilot with online grocer GrubMarket and Los Altos’ DeMartini, a mom-and-pop grocery store.

“We want to run deliveries as our major business,” said Jewel Li, AutoX chief operating officer. “We see huge potential for last-mile deliveries especially for groceries and food. This is a market where the human labor cost is high.”

One twist: When customers come to retrieve groceries, the backseat window rolls down to show a shelf of goods they can buy on the fly: snacks, nuts, canned drinks.

San Francisco on-demand delivery company Postmates has teamed with Ford Motor Co. for a Florida pilot project delivering goods in Ford autonomous vans with backup drivers. Earlier this month, Walmart joined the project.

Vikrum Aiyer, Postmates vice president of public policy, said he sees autonomous cars and sidewalk robots as ways to extend the reach of Postmates’ human couriers, rather than replace them.

“I can’t definitely say this will be the wave of the future,” Aiyer said. “Will a customer want to get up off their couch and go outside to pick stuff up? There’s a lot of value in testing behavioral psychology.”

Carolyn Said covers the on-demand economy (new marketplaces such as Uber, TaskRabbit and Airbnb that let people rent their time, goods and services), the impacts of automation and AI on labor, and the world of autonomous vehicles. Previously she covered the housing market and foreclosure crisis, winning awards for stories that shed light on the human impact of sweeping economic trends. As a business reporter at The Chronicle since 1997, she also has covered the dot-com rise and fall, the California energy crisis, the corporate malfeasance scandals, and the fallout from economic downturns.